Prof Bob Walker & Dr Betty Gon Walker Oo 24 March 2014 ir, Alex Malloy PCPA (Chit Executve, CPA Australia (GPO Bex 2820 Melbourne VIC Australis 200% jeint anainst 2s of led ‘ih sewn standards n assianee emaaneets Wie refer to @ repat issued in September 2013 by a ‘commites'sived an Independent ‘extnge Rewau Pane (the Panel) The Panel was engaged to revew the costings of he Sen Onposton’s election promises. Mr Lon Scanlan, who was a member ofthe Panel, vas atid as former Auster General of Queensland, and is qualification were Usted as Irctading membership of CPA Australia, ‘Acopy of his report as cstrbuted by the ther-Oppositon I ettached as Annexure io doubt CPA Austaa would agree that ts members aro engaged to undertake rvs we graneial infomation Cecluding projected or forecast nancial formation) fi essen artes members comply ful it the profession's standards. You would be avare that Qanards on Review Engagements estabish requirements on the responsibities of an tater or assvanee practitoner, when engaged to undertake a review engagement and on theforn and contnt ofthe auditor’, or assurance practioner’, view report Moreover, CPA Australis assrs thatthe primary responsibly of members ofthe profession Meee in the public interest. Pint itis a matter of signfeant public interost tat ary we spvenoss provided concerning pubic ctor Rrancas that are distributed pir to fedora! eelon ahead be scrupulously crated and reported in accordance with professional standards. “The Panels reprt was published just prior othe lat federal eection and statements made Drreprosentaivos othe then-Oppesiion indicated thatthe report was intended {0 f07™ eo ee ence voter In that election. Indeed, a document Wed Tne Coaion's igarous Foly Costngs Process (August 2013) went so far as to cam that the Panel woud Fependenty verity te then Opposton’ ‘oles and ‘vosinge(p. 2) he polis we se speperly costed and verified (p.4); the Expert Panel of Review woul review and Seriy ine reasonableness and accracy ofthe assumptions and fgurs in the Coalion Sere en pronde essurence that policy spends and cost savings Were deecree section PX ofthe document and + United assurance that noting has come to the assurance practioner’ attention that causes the aosurence practioner to elev te prospective nancial infermation Reali unreasonable; or (with both reasonable or ited assurance on each ofthe der _clements of the prospective tnancial information and pat of the conusion i ‘adie, a ciear descriton ofthe reasens forthe mexican withthe ‘flocs appropristaly quae, tote extent reasonebly practeal, and ‘iselesed in the asurance ropa. Pane! failed to identity the entities whose prospective fancla information was the ‘subject ofthe assurance report ‘ill be nce that ASAE 3450 paragrenh 118 (2) species that an assurance report should cleaty identify the ‘scope! of the prospective information, The Panel's reper did no such thing. IK may be responded that was ‘obvious! thatthe report referred (o prospective fencia! ‘uncommerciaf and in its eurent configuration, would be primary \Sependent upon future Budgetary allocations a claim that (terms of Govemment Peres Statistics) would suggest thatthe then Opposition beeved that the NBN shouldbe regorded 438 pat of general government. Regardiess of whether the NBN shoud beregerded as pet of Goneral government or as a non-inancial_puble trading enterprise, complance wt ASAE 3450 would have required that some explanation of the scope ofthe ‘sings: be included inthe Panets report. Panel fed to disclaim responsibility forthe achievabty ofthe results indicated by the prospective financial Information ASAE 9450 paragraph 118 (9) prescribes that the Basle Elements of the Assurance Report Incluce statements that (0 actual results are they tobe diferent trom the prospective fhanclal information Sines atipated events or tansacion(s) frequently dono! oucur as eared and the variation cobld be material lecisim the assurance practioner’ responsiblity forthe achievablity of the ‘results indicated by the prospective franca nformaton: [The Panes ture to include these dlscisimers ls parcular serious given the context. The document tiled The Coalton's Rigorous Poicy Costings Process (huge 2019) hea jublely claimed that the Panel would provide assurance that ts polley spends and cost savings were ‘achievable! (page 8). The Panel's report id not include and approprate ‘isclaimer, and simply ignored tis requitement ~ possibly out of palcal consiiertoon 8Evidence coed upon by members ofthe Panel ‘ASAE 2450 paragraph 56 asserts that the aesuranee prattioner shall oblsin sufcert ‘2pproprine evidence on which lo base the conclusion. ASAE. 9480 also directs practitoners 1o apply extensive procedures inthe course of he assigemert For example, paragraph 111 states thal the assurance pracioner's acsurance procedures oh the assumplions chal Include: (@) reading the most recent audted or reve tirancil report, and, if appropriate, the most recent prepared enna or item fancial formation, ta enable the ‘assessment of the assumptions used in the preparation of the prospectve Financial formation: (©) enquiry of te responsible party of (the source, degree of relabilty, uncertainty, veriabilty, and vatdty ofthe | ‘assumptions including whether the assumplons ae Teasonable, objectively | (the te period the assumptions cover j (Gi) the methodology used in thelr development and quantieation, including the fetentto which they are affect by the responsible party's judgement (the keto ofthe assumpsions actualy occuring: (Ref Para. AST) () wither the assumptions have a wide range of possbiliies. or ther ‘outcomes sre pariculatly sensive to fucvaliona, and io, the elect on the ‘rospectve financial information of such senstivles. andlor (wi) whetner any hypothetical assumptions are included, and if 5c, their | ‘moteiity to the prospective financial formation, i (6) evaluating whether al material assumptions required fer the preparation of the prospective financial information have been dentfid, (@) determining whether the assumptions used inthe preparation af he prospective financial information are consistent with tre stared basle of preparation, (2) determining wheter the assumptions are arthmelcaly correct. (9, ciaining appropriate evigence to suppor al materal csumptons: (0) evaluating wheter the assumptions are within the ents capacity to achieve in ght ofthe assurance praciteners understanding of the prospective finanell infermation; (7) _perfaring, or reviewing the responsible party's sensi analyls to teet the responsiveness, r otherwise, ofthe prospective fnancal information to material : chenges In key assumptions underying that prospecthe financial information and © considering the responsible party’ rolance on the werk of expert in relation to the assumptions. tis noted thatthe description of the work undertaken bythe Panel, as stated in the Panel's ‘epor, suggests that rellance was placed on (o) ebove (ce. questioning the responsitie party) rather than undettaking indepensent snails, checking calultions and obtaring evidence as is required, for example, by ASAE 2480 paragraphs 111 (c,(e. (9 and (. “ASAE 3450 paragrapin 57 clearly sales thatthe malt of dey or expen volved is ‘ot in tse a ali basis for ming an evdence-gatherng procedtre for which there fs no iterative. If the Panel did not undertake i own evidence gathering procedures, then arguably tis should have been explained (see ASAE 000 paragraph 8), “